At COP27 UN Climate Negotiations, Money Talks Louder Than Ever

President Joe Biden and other world leaders are meeting this week in Sharm El Sheikh, Egypt, for negotiations on mitigating climate change. The two-week gathering, known as COP27, follows another year of devastating floods, storms, heatwaves and droughts around the world, exacerbated by rising average temperatures.

The carbon dioxide level in the atmosphere reached this year 421 parts per millionthe highest in human history, and the planet just got one of its own hottest summers ever.

But climate change isn’t the only problem everyone is thinking about: inflation, conflict, food shortages, supply chain hitches, rising energy prices, and yet, the Covid-19 pandemic is also a concern, even if they don’t specifically target the agenda. That is likely to thwart the drive for more aggressive reductions in greenhouse gas emissions.

The United States awaits the outcome of midterm elections that could speed up or slow down its climate change efforts. The Russian invasion of Ukraine and the ensuing energy crisis have meant that countries like Germany restart coal plantswhile fuel shortages are drive up demand for more mining and drilling for fossil fuels. Inflation concerns have dampened efforts to deploying clean energy in Canadawhile China more than 15 gigawatts of new coal-fired power generation. The driving and flying have also increased compared to 2021.

As a result, one of the goals of the Paris climate agreement – to ensure that the global average temperature does not rise more than 1.5 degrees Celsius above pre-industrial levels this century – is drifting even further out of reach, and time is running out. To achieve this goal, global greenhouse gas emissions would need to fall by about half from current levels by 2030, but they are ready to soar again this year.

“The 1.5 degrees [target] is in intensive care and the machines vibrate. So it is in great danger. But it is still possible,” UN Secretary-General Antonio Guterres said at a press conference last week. “And my goal in Egypt is to make sure we muster enough political will to really push this opportunity forward, to make the machines work.”

But so far only 24 of the 193 parties to the Paris Climate Agreement have stepped up their climate change targets since the last COP meeting in Glasgow, Scotland.

So what can this meeting accomplish that the previous ones have not?

While other concerns for negotiators abound, the economic and environmental perils of continuing to rely on fossil fuels have never been more vivid. More than ever, some countries want to move away from coal, oil and natural gas. Clean energy technologies such as wind and solar are cheaper than ever and undercut fossil fuels in many regions. Meanwhile, developing countries already dealing with the acute effects of sea-level rise, heat waves and flooding hope that delegates will finally reach an agreement to make richer countries pay for climate damage and adaptation.

However, virtually every previous COP meeting has passed its deadline, as negotiators bickered over every “possible,” “should,” and “will,” forming tepid agreements that left few happy. For an urgent problem such as climate change, the process is excruciatingly tedious. But it’s the best system we have.

Energy is expensive, but so is climate change

In much of the world it is becoming more expensive to fill up cars, turn on the lights and heat homes. And as the Northern Hemisphere enters winter, prices are expected to rise higher.

International Energy Agency

That’s due to a number of factors, including the Russian invasion of Ukraine, the global economic recovery after the Covid-19 pandemic and overstretched supply chains. Faced with these constraints, negotiators are likely to be less ambitious about stepping up efforts to reduce greenhouse gas emissions in the near term or spending money to adapt to warmer temperatures.

“We are not tone-deaf as a nation or as a government to the tug-of-war that has taken place in relation to the market – from Covid, from the effects of inflation and the effects of inflation that came significantly from the war and the shutdown of major energy supplies and its recasting,” said John Kerry, the US climate envoy, during a press conference last week.

The costs of climate change are also becoming increasingly apparent. Few countries enter Egypt unscathed under the effects of rising temperatures. The White House estimated in April that climate change would cost the US economy by 2100 $2 trillion a year.

At the same time, some countries are finding that cleaner energy sources such as wind and solar are helping to insulate them from shocks in the international fuel market while meeting their demand.

The International Energy Agency reported last week in its World Energy Outlook that “higher shares of renewable energy were correlated with lower electricity prices.” The report adds that renewable energy will absorb most of the increase in energy demand in the coming years. It also predicts that demand for coal, oil and natural gas will peak and fall before the end of the decade as countries rethink their energy systems.

“The environmental issue for clean energy did not need to be reinforced, but the economic case for cost-competitive and affordable clean technologies is stronger now – and so is energy security,” IEA Director Fatih Birol said in a statement. pronunciation.

The question then is how this will manifest itself in the negotiations. Countries are reluctant to commit to doing more to curb their own emissions. Most are fail to meet their existing commitments. And the current round of pledges, known and nationally determined contributions (NDCs), are already inadequate to meet the goals of the Paris agreement.

IMF

So the challenge at COP27 is not only to increase climate change ambitions, but also to increase accountability to put those commitments into action.

Money talks, and the world says very little

Money is the perennial stumbling block at COP meetings, especially funding to address the fundamental inequalities of climate change: the countries most affected by rising average temperatures have contributed the least to the problem.

In principle, there are some mechanisms to do this, but they have fallen short. One involves rich countries pooling $100 billion a year to fund climate change adaptation and mitigation projects in developing countries. But funders missed the 2020 deadline for their commitments and pushed it back to 2023. The US pledged to double its contributions to the program last year, adding $11.4 billion per year. But Congress only appropriated this year $1 billion.

Another problem is compensating countries for the loss and damage already occurring as a result of climate change – things like property damage, degraded ecosystems and declines in crop yields. One estimate indicated that this could cost the world between $290 billion and $580 billion a year by 2030. However, there is no agreement on what counts as a climate-related loss, and there is no funding target. Rich countries continue to resist, even recognizing these effects, for fear of opening the door to legal claims of liability.

“With rich countries, it’s always the fear that some sort of recovery framework will come out that will come at an ever-increasing cost,” Rachel Kyte, a climate negotiations adviser and dean of the Fletcher School at Tufts University told cafemadrid last year. “They are willing to talk about today and tomorrow. They don’t want to talk about yesterday.”

Fida Hussein/AFP via Getty Images

With rising inflation, many countries are trying to get their houses in order. But discussions on international climate finance have dragged on for years, threatening the credibility of the negotiation process.

“Involvement and making clear progress on loss and damage would be the litmus test for this COP,” Ani Dasgupta, CEO of the think tank World Resources Institute, told reporters last week. “We hope that the US and the EU will no longer hesitate and become real leaders.”

This week, leaders including Biden and British Prime Minister Rishi Sunak will attend the meeting and deliver speeches to set expectations. But the minds of some of the largest greenhouse gas emitting countries, including China’s Xi Jinping, Indian Narendra Modi and Russia’s Vladimir Putin, are not present. Meanwhile, behind closed doors, delegates will meet in person to work out some of the trickier topics and lay the groundwork for the planet’s future.